Boehner says debt limit should be part of talks

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WASHINGTON – House Speaker John Boehner insisted on Friday that any deal with President Barack Obama to avert the so-called fiscal cliff must include lower tax rates, eliminating special interest loopholes and reining in government-benefit programs.

"2013 should be the year we begin to solve our debt through tax reform and entitlement reform," Boehner said.

Boehner and Obama have taken the initial steps in high-stakes negotiations over how to deal with expiring Bush-era tax cuts and automatic spending cuts to defense and domestic programs that economists warn could plunge the nation into another recession.

Boehner, Obama and Senate leaders face a Jan. 2 deadline to reach an agreement or at least come up with a framework to deal with the issue early next year.

Boehner expressed a degree of optimism about resolving the issues and ensuring that his sometimes reluctant GOP rank and file will back any deal.

"When the president and I have come to an agreement, there's been no problem getting it passed in the House," Boehner said.

The speaker declined to discuss specifics on deficit targets or what tax loopholes to eliminate though he cited both corporate and individual.

Boehner indicated that increasing the nation's borrowing authority, which was a divisive issue in August 2011 talks, should be part of any talks in the coming weeks on avoiding the fiscal cliff. The government has said the nation won't reach the debt limit until the spring.

"It's an issue that's going to have to be addressed, sooner rather than later," he said.

Boehner said he had a brief, cordial conversation with Obama earlier in the week and reiterated that the president needs to lead on the negotiations.

Democrats have resisted including entitlement programs such as Medicare and Social Security in any deficit-cutting deal. Senate Majority Leader Harry Reid, D-Nev., said earlier this week they were unwilling to make changes in Social Security.

Boehner insisted that the programs need to be on the table.

"It's not like there is money in Social Security and Medicare" trust fund, Boehner said. "This has to be dealt with."

The Ohio Republican, reflecting the sentiment of his caucus, said increasing the maximum 35 percent tax rate on high-income earners cannot be part of the deal. Boehner did signal that he was open to eliminating loopholes.

"The problem with raising tax rates on wealthy Americans is that more than half of them are small business owners," Boehner said. "Raising tax rates will slow down our ability to create the jobs that everyone says they want."

The Republican leader acknowledged that his party faces several roadblocks after Obama won a second term and the GOP lost seats in both the House and the Senate.

"It's clear that as a political party we've got some work to do," he said.

Republicans fared poorly with Hispanic voters. The fastest growing minority group went heavily for Democrats, backing Obama by more than 70 percent. Boehner signaled a willingness to tackle immigration legislation next year.

"What I'm talking about is a common sense, step-by-step approach, would secure our borders, allow us to enforce the laws, and fix a broken immigration system," he said. "But again on an issue this big, the president has to lead."